ch 13: employee benefits and services Flashcards
describe employee benefits
- indirect financial payments that an employee receives during employment
- employee services are growing in importance as part of the total compensation
- benefits matter to employees
- benefits aligned with business strategy help attract and retain the right people to achieve business objectives
- benefits administration is an increasingly specialized task
- benefits must comply with a wide variety of laws in Canada
what are thr 5 govenrment-mandated benefits?
- employee insurance (EI)
- Canada/Quebec Pension Plans (C/QPP)
- workers’ compensation
- paid time off
- pay on termination of employment
what is employment insurance (EI)?
- federal program intended to provide temporary financial assistance to eligible persons who experience interruption to their work through no fault of their own.
- funded by contributions from employees and employers
- EI is perceived to be a benefit since it provides employees who are laid off, terminated without just cause, or who quit their job for a justifiable reason (such as harassment) with an alternative form of government income until they secure employment
how does someone qualify for EI?
- an employee must first have worked a minimum number of hours during a minimum number of weeks, called a qualifying period (the number of hours and weeks varies among regions of the country)
- there is a waiting period from the last day of work until benefits begin. The length of the waiting period varies, but it is usually two weeks.
- If the employee was provided with severance pay or holiday pay at the time of losing the job, these payments must run out before the waiting period begins
describe Canada/Quebec pension plans (C/QPP) and the different types
- provides working Canadians with a basic level of financial security on retirement
- types of benefits:
- retirement pensions
- disability benefits
- survivor benefits
- Benefits are payable only to those individuals who make contributions to the plans or to their family members.
describe the retirement pension
- 25 percent of the average earnings (adjusted for inflation up to the average inflation level during the last five years before retirement) over the years during which contributions were made
- can choose to begin receiving benefits at any time between the ages of 60 and 70
- Benefits are reduced on early retirement before a predetermined age (usually 65) and are increased in the case of late retirement.
describe disability benefits
- only paid for severe disabilities that are expected to be permanent or to last for an extended period
- 75 percent of the pension benefit earned at the date of disability, plus a flat-rate amount per child
describe survivor benefits
- paid on the death of a plan member
- A lump-sum payment is made to the plan member’s estate, and a monthly pension is also payable to the surviving spouse and each dependent child
describe workers’ compensation
- provides sure and prompt income and medical benefits to victims of work-related accidents or illnesses, regardless of fault
- benefits are non-taxable
- controlling costs:
- focus on accident prevention, safety, and health programs
- rehabilitation and modified return to work programs
- workers are required to co-operate with initiatives
- Every province and territory and the federal jurisdiction has its own workers’ compensation law
describe controlling workers’ compensation costs
- Although workers’ compensation boards pay the claims, the premiums for most employers depend on the number and dollar value of claims that are paid.
- two basic approaches to reducing workers’ compensation claims:
- firms try to reduce accident-or illness-causing conditions in facilities by instituting effective safety and health programs
- employers have become involved in instituting rehabilitation programs for injured or ill employees
what are the different types of paid time off?
- maternity/paternity leave
- vacations
- legislated holidays
- paid breaks
describe maternity/paternity paid time off
- up to 68 weeks
- guaranteed of old or similar job on return to work
- The amount of maternity leave is 17 or 18 weeks in each jurisdiction (15 weeks in Alberta), but parental and adoption leaves range from 34 to 52 weeks
- guaranteed their old jobs or similar jobs when they return to work
- can be taken by one parent or split between both parents
- Some employers provide full or partial pay for all or part of legally required unpaid leaves by “topping up” what employees receive from EI
describe vacations paid time off
- labour/employment standards legislation sets out the minimum amount of paid vacation that must be provided to employees
- More firms are taking a more flexible vacation leave approach
- Vacation policy decisions include:
- Are employees paid for accrued vacation time if they quit before taking their vacations?
- Are employees paid for a holiday if they don’t come to work the day before and the day after the holiday?
- should employers pay some premium—such as time and a half—when employees must work on holidays?
describe legislated holidays paid time off
- number of paid holidays varies from one jurisdiction to another from a minimum of five to a maximum of nine
- Additional holidays may be observed in each province
describe paid breaks for paid time off
- mandated paid and unpaid time off requirements within a work day at the provincial, territorial, or federal level.
- some jobs (shift work) required an uninterrupted break after a set number of hours
- if employee is under direct control of employer and expected to be available for work during this time, the break must be paid
- otherwise, it is unpaid (coffee and eating breaks)
describe pay on termination of employement paid time off
- employment/labour standards legislation requires that when employment is being terminated by the employer, the employee must be provided by termination pay
- requirements:
- reasonable advance notice periods
- advanced notice for mass layoffs
- severance pay
describe reasonable advance notice for pay on termination of employment
- provide employee in advance with a written notice
- advance (reasonable) notice applies only to employees whose employment is terminated through no clause of their own
- alternative is pay in lieu of reasonable notice and employee ceases to work immediately
what is advance/reasonable notice?
Advance written notice required if the employer is going to terminate employment of a worker without cause
what is pay in lieu of reasonable notice?
Advance written notice required if the employer is going to terminate employment of a worker without cause
describe advance notice for mass layoffs for pay on termination of employment
- some provinces require additional pay when the layoff of more than 50 employees occurs
- BC, Manitoba, Ontario, New Brunswick, Newfoundland, and Labrador
- The rationale behind this regulation is that larger layoffs result in longer time to re-employment, so in cases of larger layoffs, the employees are given longer reasonable notice period
describe severance pay for pay on termination of employment
- an additional payout on top of the minimum notice period requirements
- only applies in certain specific conditions in the applicable jurisdictions
- Employees only in Ontario and the federal jurisdiction may be eligible for severance pay in addition to pay in lieu of notice in certain termination situations
- The amount of the severance pay is one week’s pay for each year of employment (maximum 26 weeks)
what are the different voluntary employer-sponsered benefits?
- life insurance
- supplementary healthcare/medical insurance
- short-term disability plans and sick leave plans
- long-term disability plans
- mental health benefits
describe life insurance
- almost all employees provide group life insurance plans
- accidental death and dismemberment coverage:
- provides a fixed lump-sum
- critical illness insurance
- lump-sum payment for a life-threatening illness
what is group life insurance?
Life insurance is provided at lower rates for all employees, including new employees, regardless of health or physical condition